Cramer's 'Mad Money' Recap: Rally Rules

A rally can teach you a lot about your portfolio, Cramer told viewers. He said if your stocks are dramatically outperforming the averages, that's reason for concern.

Cramer said it is possible to make too much money in the markets. He said if your stocks are pouncing the markets, then it simply means one thing: You're taking on too much risk. Crushing the averages in a rally, he said, can get you crushed in a sell-off.

One way to prevent such a crushing is to stay diversified, Cramer said, which is why he preaches diversification every week on "Mad Money." "Keeping all your eggs in one stock basket can wipe you out in a heartbeat," he reminded investors.

--Written by Scott Rutt in Washington, D.C.

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